Are You Ready For A Tribunal Fee-Free World?

July 2013 heralded the introduction of fees in the Employment Tribunals (ETs) and Employment Appeal Tribunal (EAT), with the Government proclaiming its aims were to discourage claimants from pursuing weak “nuisance” claims and to reduce the cost of the system to the tax. While at first glance these would seem to be perfectly reasonable objectives, there was in fact a steep drop in the level of claims by around 66-70%, with ACAS reporting that 1 in 10 potential claimants that contacted them decided against issuing a claim specifically because they could not afford the fees, which at up to £1,200 were not insubstantial.

Almost 4 years to the day since the introduction of fees, the highest Court in the land, the Supreme Court, ruled that the employment tribunal fee regime was unlawful, prevented access to justice and disproportionately affected women. The fee system was scrapped immediately. This decision came as a surprise to many and has understandably caused concern for employers, who may well have relaxed their HR practices in light of the reduced risk of facing a tribunal claim. As the dust starts to settle now is a good time for employers to review their HR practices to ensure they stand the best chance of successfully defending tribunal claims, so we have set out below some top tips to assist.

Written Contracts

Employers are obliged to provide certain written terms of employment to employees within 2 months of them starting, but more comprehensive contracts can help you to protect your business interests by clearly communicating your expectations and making clear the terms that apply to the relationship. Having up-to-date and well drafted templates for this can assist you in meeting your obligations and ensure that your terms are consistent, which in turn reduces the chance of mistakes occurring where you make incorrect assumptions about the terms that apply to a particular individual.

It’s also important that you review employment terms over the course of employment as, for instance, you may find that the terms no longer make business sense or reflect the true arrangement between you. You may be aware of some recent high profile cases in the news featuring individuals working for UBER and Pimlico Plumbers apparently in self-employed arrangements, but who were found to be workers and therefore entitled to certain employment rights such as National Minimum Wage and holiday pay. A finding such as this leaves the business open to claims for unlawful deductions from wages and holiday pay (amongst others) and could well trigger HMRC to make demands for income tax and NI contributions. It’s therefore important now more than ever for you to ensure that your contracts reflect your true intentions and that they are reviewed and kept up to date.

In order to help you identify potential areas of weakness we offer a free HR Health Check of your contracts to alert you to any weaknesses that could be addressed to better protect your business.

Policies

Some employer’s take a “light touch” approach to policies, while others prefer to implement a wide range to address common issues in the workplace. However, regardless of how many policies you issue, it is essential that you make staff aware of them and keep them up to date with your business practices and the changing legal landscape. The most common issue we see is that policies are drafted, but not communicated correctly to staff. In essence, this prevents you from relying on their contents and is therefore self-defeating.

Policies aren’t necessarily essential, but we would recommend that you put the following in place as a minimum to assist you in complying with your legal obligations:

• Disciplinary Procedure
• Grievance Procedure
• Health & Safety Policy
• Anti-Corruption & Bribery Policy
• Equal Opportunities Policy
• IT & Communications Policy

Once you have policies in place it is essential that you review regularly (every two years or so is fine) and, if you have more than a couple, it may be worth consolidating them into a staff handbook so that they are readily available in one place.

Training

Much like policies, training can be a great tool to protect your business. Conducting reasonable procedures is key to defending many claims from employees, so ensuring that your managers have HR training and are aware of how to conduct grievance and disciplinary procedures effectively can fend off any potential claims. Also, staff training on issues such as equality and diversity can also help you to defend discrimination claims on the basis that doing so demonstrates you are taking reasonable steps to prevent discrimination in your workplace.

At Bermans we offer a range of training courses that we can deliver to your staff over either half day or whole day courses and we are also always open to designing bespoke training to suit your particular needs.

Records and Communications

Documents are often key to successful defence of a claim, so it is always advisable to take a written note of discussions with employees that relate to HR issues and have a paper-trail of processes such as disciplinary investigations. Records should be stored in a secure place in accordance with your data protection obligations.

It’s also important to keep in mind that all internal communications, such as emails between colleagues, will potentially be disclosable to the ET and the aggrieved individual in the event of a claim and will form evidence that could either strengthen or undermine your position. Think carefully about the content and tone of written communications to minimise the risks around this. Communications with your solicitor will be exempt from disclosure, but that is unlikely to be the case with other HR or employment law professionals. It’s becoming a more frequent tactic for the aggrieved employee to seek disclosure of communications between businesses and their non-solicitor advisors and we are aware that this has been problematic and caused many a defence to fail.

Take Advice

Taking advice on issues early and as they arise can help to significantly reduce the risks of something escalating into an expensive claim. A well timed conversation with a specialist employment lawyer is likely to assist you in identifying strategies to resolve conflict or achieve your objectives with minimal risk, so saving you time, effort and costs in the long run. While we can advise you on a “pay as you go” basis, we are also able to offer fixed fee annual retainers that can provide you with on-going support and advice with HR and employment law issues that arise throughout the year for a fixed fee, providing peace of mind that you have expert support, but also certainty as to the costs of that.

Insurance

The recent decision of the Supreme Court will undoubtedly increase the risk of employers facing claims in the ETs, so now may also be a good time to consider taking out an insurance package to cover potential claims from employees and provide some certainty as to your legal spend. Most packages come with access to legal advice, which can assist you to resolve matters before they escalate to the point of an expensive claim, but you do need to be mindful of the need to take legal advice and notify the insurer of risks as they arise, since both are likely to be conditions of the insurance.

Keeping Up To Date

The legal landscape of worker entitlements is frequently changing and it’s important that employers keep pace. National Minimum Wage, SSP and statutory family pay rates such as maternity pay are usually reviewed and increased annually by the Government. As these are regularly updated they may well already be on your radar, but there have been some significant developments outside these common increases and which have come about as a result of recent decisions the EAT and Courts. In particular, changes to the way in which holiday pay must be calculated have caught out many businesses, as there is now a need to factor in certain allowances, commissions and overtime payments, whereas many businesses historically only paid basic pay during holidays.

Bermans Employment Law Updates

Here at Bermans we offer regular free email updates on developments in employment law and interesting cases, which can help businesses keep up to date. We also run regular update seminars covering recent developments throughout the year, with our next taking place in Manchester on Wednesday 29th November 2017. If you are interested in receiving these email updates or attending one of our seminars, please email marketing@bermans.co.uk for further details, or if you would like to discuss any of the issues mentioned in this article, feel free to contact our employment team directly.